- Nvidia and AMD shares fell Thursday as the US moved to restrict the sale of high-end chips to China and Russia.
- The Biden administration's new licensing requirement may lead to a $400 million reduction in Nvidia's Q3 sales.
Shares of Nvidia and other semiconductor companies fell Thursday after the US government restricted the sale of some advanced chips to China and Russia because of national security concerns.
Nvidia shares dropped as much as 12% to an intraday low of $132.70, the lowest price since March 2021. The shares hovered around that price during early afternoon trade. The stock this year through Wednesday's session had lost 49%.
Nvidia in a filing with the Securities and Exchange Commission said the US government has imposed a new licensing requirement to sell its A100 and H100 chips for high-performance graphics processing units, or GPUs, to China, Hong Kong, and Russia. Nvidia noted it doesn't sell products to customers in Russia.
The US government "indicated that the new license requirement will address the risk that the covered products may be used in, or diverted to, a 'military end use' or 'military end user' in China and Russia," Nvidia said.
Nvidia said the new rules may hinder it from developing its H100 circuits in a timely manner or supporting existing A100 customers and that it may have to move some of its operations out of China. It may see a $400 million hit to third-quarter sales if customers don't want to buy its alternative products, if the government doesn't grant licenses in a timely fashion or if it denies licenses to significant customers, the company said. Nvidia's guidance issued on August 24 includes the potential sales decrease.
AMD shares lost as much as 7.5% then trimmed the loss to 6.9%, with reports saying the company was told by the US government to stop selling AI chips. Shares of Taiwan Semiconductor, which makes some products for Nvidia and AMD, moved 3.4% lower.
The move comes after US President Joe Biden in August signed a $280 billion package aimed a boosting the US chip sector and scientific research.